>> production assistance for "inside washington" was provided are all pretty communications and political, reporting on the legislative, executive, and political arena. >> i do not see a path to a deal if they do not budge period. >> it takes two to tango, and they are not there yet. >> is the grand bargain headed for the bargain basement or the trash heap? what happens if there's no deal on raising the debt limit? >> a huge calamity that would affect everyone. >> if that is going on in my party, with headiness over

patriotism, it is disgusting to me. >> how much is real? how much as politics? the approach is not balanced. it is not fair. it is not moral, and it will not be accepted. >> i have little question that as long as this president is in the oval office, a real solution is probably unattainable. >> is anybody in washington listening to the american people? >> i think it is usually embarrassing and a great black eye for the united states of america. >> it is getting serious now, folks. if the white house and congress do not come to terms before the august 2 deadline, moody's is talking about downgrading united states aaa bond rating. standard and poor's also talking about a downgrade. this is the united states we are talking about, not some third

world country. in his interview on cbs evening news the other night, the president warned that the impact will have an immediate effect on social security, veterans' benefits, and medicaid, said he could not guaranteed checks would go out on august 3 if the issue has not been resolved. the president said he would not agree to a short-term solution. >> you think it is hard now, imagine how these guys will be thinking six months from now in the middle of the election season. it is not going to get any easier. it is going to get harder. we might as well do it now. pull off a band-aid. eat our peas. [laughter] now is the time to do it. if not now, when? >> the president and congressional leaders have1been meeting all week long. at one of those meetings, the president reportedly said the house majority leader, don't call my bluff.

the president threatened to veto the solution, reportedly saying that it may bring down his presidency, but he will not yield. all the rhetoric aside, will they strike a deal? >> i honestly do not know. the final analysis is that both sides will say for the good of the country, t united states cann go into chapter 11. we have to reach a compromise. what you have right now is the base of the republican party calling for the first time in the history of budget reconciliation, ruling out any increase in revenues of any sort. that is a change, and democrats will not stand by and let all the cuts come from domestic, including medicare. >> in thend, they will obably bailout together. mcconnellas offered a plan that will allow each -- give them an escape hatch, essentially hand the debt issue completely over to the president

and have it resolved on election day next year by putting the question to the country. if you want to take the positive or the long view, it is that you have two parties with completely different conceptions of government. this is a symptom of it, and you cannot resolve it, so the people will decide next year. >> my husband said to me a couple of nights ago that we've got each other. i'm not sure they are going to get a deal. i think mcconnell has come up with a clever -- somewhat cynical, but forthright -- the idea that could probably get as out of this, but i'm not sure that boehner can deliver a substantial number of his own folks, and it is the democrats in the house who can be equally responsible to the base of the republican party. the base of the democrats can do the same thing. i'm not 100% sure it can get through the house.

>> they have a wake-up call again this week from the business community and economists who said, "do your jobs. we cannot go into default on august 2." look at how we got here. the house of representatives had an opportunity to raise the debt limit earlier this year, last month, and they voted it down. all the republicans voted dow this act that has been taken routinely over 90 times in the country's history. now, we have the mcconnell plan, which is as craven as it can be, in the sense that it closes all the responsibility for solving the problem on to the president, provides for democrats to assist in the plan and take the republicans off the hook so they do not have to do a thing with raising the debt limit. >> mitch mcconnell -- "i refuse to help barack obama get reelected by marching

republicans into a position where we have co ownership of a bad ecomy." >> i think mitch mcconnell deserves credit for candor. and in a murky washington were petty squabbling passes for serious rhetoric, he has been very blunt. what he is saying is to his own party, "if we let this happen, we say now that barack obama owns the economy politically, its president going into a reelection campaign, and our fingerprints are all over this disaster of the united states going into chapter 11, then we will on the economy with him. we will be co-owners. so, forget about it, folks." i think it was a very candid and grown-up piece of advice. >> let' look at how we got here. republicans were the ones who got with raising the debt ceiling to deep cuts. they were the ones who created the fiction and sold it to their

supporters that somehow the two were tied together raising the debt ceiling with increased spending. in fact, there were no new authorizations in appeared faced with the prospect, mcconnell has no means to default. he wants to back away from it. but as he stepped up and say they want to share the sacrifice? he takes his party off the hook, allows his party to vote against raising the debt limit, shift responsibility to the president and to the democrats to sustain the president's actions. i do not see anything bold or courageous there. i see something very craven. >> 60% feel any agreement to raise the debt ceiling should include tax hikes on the wealthy and corporations. the american people are not quite where -- >> you can use anyone you want, but there is a gallup that shows that if you ask americans if they want to solve the debt problem with taxes or spending, those who say -- or exclusively taxes, 10%, mail/exclusively

spending, 50%. you can produce any number you want. i think people would rather cut spending and raise taxes, but the larger issue is how do you deal with the crisis at hand? ihink the republicans have one option, and i'm surprised they have not seen it and will not take it. president, as you showed, has said he will not accept the short-term deal, but there is no principle to reason why he should not. everybody understands the only reason he wants a longer to 1, which means until election day, is to get himself off the hook. it is a partisan, self interested reason. >> republicans ought to pass a short-term deal,ay, $500 billion in cuts, raise the ceiling by $500 billion, and it gives you until the end of the year. let the president veto. how will be argued in principle. he cannot.

>> i think that the problem is when you go from crisis to crisis, and already you have -- if you are a business person, why would you invest in this atmosphere? people are genuinely alarmed. if you really want to say something cenacle, it might be -- some people actually believe that the republicans want the economy to get worse or to help them in the election. i don't believe that. >> let's keep going. we will have more of the same. >> the house leader has shown that he should not even be at the table. republicans agree he should not be at the table. >> let me just say, we have been in this fight together. any suggestion that the role that eric has played in this meeting has been anything less than helpful has been wrong. >> some democrats, harry reid for example, have been selling a line that the house majority leader is undermining the speaker of the house and these

negotiations, so john boehner felt compelled to go before the cameras to declare that they are in the foxhole together. >> harry reid is an objective observer. this is a joke. if anybody at the childishly in the meeting, i would say it is the person who stood up, said enough is enough, walked out of the meeting, who happen to be the man of olympian detachment. cantor is representing the part of the republican caucus, which is much more set against raising the debt limit unless it's commensurate spending cuts. the president obviously is not moving on this. he talks a good game. prepared to do entitlements, ready to do entitlements. not once has he ever enunciated in public other than all these leaks, which i do not trust for half a second, one structural change in entitlements.

without that, everybody over the age of nine knows we will not get handle on the debt. so let's hear him say in public once. >> why is it that when he offered the big deal, the $4 trillion deal -- >> the grand bargain. >> the grand bargain, republicans backed away from it. >> when did he offer that? >> he offered it last week. >> where? >> he did it publicly. bamut give me a number. >> in a matter of two days, republicans backed away from that and said they did not want it. >> you accept everything he says, the $4 trillion deal. if you do not have a single item in it that you can enunciate. >> i am not at the table. perhaps you are, but i am not. >> how can you expect america to accept something in which he explains nothing? >> can we hear from mark? >> can this marriage be saved. >> i hope not. >> john boehner believed there

was a $4 trillion deal. john boehner is not a naive newcomer to washington. he has been around. but john boehner also knows some history. the last time we had a major budget deal that by every definition work was bill clinton in 1993. without a single republican voting party in the house and senate. it included twice as much in tax increases and revenues as it did in spending cuts. what happened after that? 22 million new jobs were created. the longest sustained peacetime prosperity in the history of the united states. more jobs than in eight years of reagan and 12 years of bush were created. >> newt gingrich is on the stump taking credit for it. politically, the afp knowledge running those commercials. grandpa says maybe we seem like an easy target for congress until you realize there are 50

million of us. message -- "we vote. keep your hands off social security and medicare." >> the was to be expected. what was not expected was drawn boehner -- john boehner saying the truth, that you have too many people in the room. it's hard to have a serious discussion because as soon as one person raises a point, it gets a jump on and talked to death. and then they i have a couple more seconds? -- >> may i have a couple more seconds? let me try. boehner and the president really had reached some understanding. they were going to go for the big deal. it was boehner, unfortunately, who could not get past his own caucus, could not get past his own majority leader, who was playing to the base. they have people in the house of representatives who do not believe anything will happen if the debt ceiling is increased.

that is the yahoo mentality, and they are dealing with it. by my colleague is trying to make a point about how you have a completed, compliant, growth accepting every leak out of the white house here we have been told that the president is prepared to make cuts in entitlements. name me one. >> jobs. a completed, compliant, supine press. i love that. >> i've got other additives, but we are short on time. >> the other day, abc news position cameras all around the country, and they call them soapboxes cameras. they invited people to say what they had to say about the debt ceiling. we put one of the month at the beginning of the program. people are very upset, even if they do not quite understand what the debt ceiling is. do we need to be doing our business the way we are doing it. >> i think it is rather unusual and not very democratic and to

have these immense issues decided in secret meetings behind clos doors with a battle of leaks. why have we not had hearings and budgets? the president has not produced a budget. he produced one in february. the senate defeated it 97-0. the senate has not produced a budget. we have not had anything in the regular process in which we would have open discussion. we would hav hearings, witnesses, and we would have a debate. a national, open debate on this, and that is because republicans have produced a budget, and democrats have not. it is all happening behind closed doors. >> it is a nice thought, but we are running out of time in terms of the debt ceiling. >> earlier in the year, everyone knew that the debt ceiling issue was going to come up. there were some republicans who thought this would be a great opportunity to score some

potical points. by tying the raising of the debt ceiling to these massive cuts they're going to have without any tax increases, and they had castotes on this. they really played this out. now, they got themselves in a real snit. >> let me ask you -- what about the norquist part everyone is talking about? >> they signed it. because it sounded good, and it raised some good press releases back home, but they painted themselves into this corner. now they want to get out of it because of they do not, they will get blamed for it, and along comes this crafty mitch mcconnell scheme and that helps them get away from it. they do not have to raise the debt ceiling, but they get the president to bail them out, and they can blame the president every time he raises it. >> the reason the republicans

seized on this is because they had the president propose a budget that increases our debt over the next decade by $10 trillion. they had to do something. >> there is more than a little hypocrisy on this issue. for example, eric cantor, running to be the undisputed leader of the freshman class on the republican side and the tea party caucus, and if you are drawn boehner -- if you are john boehner, you do not want to precede him down a steep set of stairs. botha himself four times under george bush without a whisper, without a syllable of criticism to rse t debteiling four times. house republicans passed a budget. one of the items balancing the budget eventually is a $1 trillion we are going to save from the wars in iraq and afghanistan. a peace dividend. now in the deliberations, republicans say that does not

count any longer. having voted for it. so there is more than a little inconsistency all the way are around. that'll it is serious when you hear some members, a freshman, and some of the people campaigning for president, saying that you really do not have to raise the debt ceiling. and you would not really compromise anything much. but the truth is, the facts showed you can pay off the entitlements, but then you cannot pay soldiers in the field. you cannot have a justice department. you cannot have anybody looking at whether your borders are sick. you cannot have education. you cannot pay anything if you pay those bills and interest on bonds. that is it. >> that is why i think the good news in as bad situation is john boehner saying he still thinks we can get a big deal. >> the rupert murdoch scandal may have cost the atlantic. at the department of justice and all kinds of federal agencies will be going after this very hard.

we will, too. >> jay rockefeller, this is about allegations of the jourlist working for media mogul rupert murdoch illegally tapped into the phone messages of thousands of people, including families of the victims of 9/11. the fbi is apparently looking into this as well. murdoch, by the way, is a u.s. citizen. tell us about this. >> this is really serious. the foreign corrupt practices act makes it illegal to take bribes anywhere. if you are a u.s.-based corporation, and news corp. is. our laws are in it. even if it did not happen here, and it might have. we might have been just oblivious to the fact it was happening here. i do not know. >> it is huge in britain. that it could bring down the camera government at some point. certainly, it will undermine cameron, all the hard things he is trying to do, will undermine that seriously.

>> i heard him in parliament your part of his defense was that the stuff was going on 10 years before he showed up. >> peter king, chairman of the house, republican chairman of the house homeland security committee, has asked the fbi to investigate because they are concerned that maybe the same kind of practice against 9/11 victims, many of whom were peter king's constituents. if that would happen in the united states, as michele bachmann would say, it takes a lot of chutzpah. >> he refused to accept the resignation, and then she resigned. >> i think this -- jay rockefeller is a serious person, and peter king is a serious person. the fact that peter king is the self-affirmed and designated advocate for all the 9/11 families and survivors, the fact that he has gone as a republican

and a leading republican on this takes out the partisanship that had gone after fox news and rupert murdoch. the strange court in this is that the bancroft family, which sold the "wall street journal" to rupert murdoch's corp., left in there a provision that if anything is done and appropriately -- and appropriately, that they can revisit that sale. this has complications right down the line. >> but we all have to knowledge that the "wall street journal" has been reporting this story -- >> [unintelligible] >> not the slightest evidence of any misconduct on the part of the "wall street journal." and the 9/11 allocation is based on a single source, and named -- unnamed, in fact, unsourced report in a tabloid in england. ought to be looked at, but it is not as if there is any evidence

other than one claim in one paper. >> but this has bigger problems for the murdoch empire. it has licensing applications all over the country. if the corporation is found guilty of a violation of the foreign corrupt practices act, it does not have to be here. and he has pulled out of the deal for the british sky. >> he was not going to get it. do not think he will not come back. >> the "news of the world" was founded in 1843. murdoch was not involved. [laughter] the talks about it in print in 1948. murdoch had not arrived on the scene. in the 1990's, all of us were titillated by the transcripts of the talk between prince charles and camilla, including a reference to the -- an amusing one to a feminine hygiene product. at the time, nobody was

concerned. it was not obtained by a court order that a judge signed, i can assure you. it was the usual british tabloid method of enticement, bribery, treachery, pay off, which has been going on for a century and a half. suddenly, everyone is scandalized. not because of the means, but the target. it involved a girl being kidnapped and the families of dead soldiers. obviously, a complete outrage. targeting very old practices of a tabloid that ever would have known about for 100 years. >> how you trap a prostitute? you why the place and record the conversations. >> there are scholarly treatises on everybody does it that i have ever heard. the reality is the allegations

here, they have bought off police, threaten police, and absolutely used every illicit illegal means, and they have to be held accountable. >> all right, roger clemens gets a walk in as perjury trial. >> i have never taken steroids or hgh. >> former pitcher roger clemens was indicted almost a ye ago for the testimony. this week, ended in a mistrial. is that it for roger clemens? 354 lifetime winds and a walk? >> i suspect if the judge does not rule against him permanently, that they will try to try him, but you watched this trial -- i have to confess that you watch this trial and the enormous resources put to it, and it gives you pause. let's put it that way. as a lawyer, it gives you pause as well appear that the prosecutors could have let this happen, and that the defense did not actually notice. it was theudge who noticed that there was inadmissible

evidence that was frozen in front of the jury on a screen. >> my question is -- how did major league baseball let this happen? >> that is the real story. there was an absolute time during which baseball had a strike and a shortened season. the crowds had not yet come back. what brought people back into the seats were suddenly these home runs. they look the other way with barry bonds and rafael palmeiro and sammy sosa and mark mcgwire, all of home stand accused of ving used these drugs. thank goodness for tom davis, a republican from virginia and henry waxman, democrat from california, will help these hearings, or they never would of been held accountable, including the owners who denied it, and the commission appeared the mark mcgwire had biceps' bigger than my thighs. would that give you pause just looking at that? >> i have no idea what your eyes look like. [laughter] one of the things -- one in -- i

have no idea what your thighs look like. one of the things you do not do is lie in front of congress. i do not care if he was doing steroids or whatever else. >> is that not what the lewinsky scandal was all about? baseball is only a game. i would correct all of this in the record books, put asterisks on all the records and keep them out of the whole thing. >> last word. thank you. see you next week. >> for a transcript of this broadcast, log onto insidewashington.tv.